Jamais, I think it's highly debatable whether SL is a scarcity-based economy, to begin with. If you visit SL and explore it at any great length, the immediate thing you'll be overwhelmed by is *stuff*, content of all kinds, high quality stuff, too. That's always been true. (Indeed, there are numerous "newbie junk yards" where clothes, weapons, etc. can be bought extremely cheaply, or free.) So I think it makes more sense to think of SL as a reputation, brand, or even *personality* economy, in which there's a high premium in owning content from the most successful, popular, and/or admired creators. Those are qualities that can't be replicated by CopyBot.

It's true that Second Life is more of a mixed-mode economy in toto than a purely scarcity-based economy, but the part of the SL economy that (a) has attracted a great deal of attention (due to its convertability to real money) and (b) CopyBot attacks directly is one where there is a "high premium" for original content. Nobody is going to get upset about the use of CopyBot to duplicate the "newbie junk yard" stuff. Some people (and it may be a small minority) are getting upset precisely because the application seems to allow the kind of duplication that both reduces a revenue source and undermines the reputational glow of ownership of particular items. It's human psychology -- part of the cool of having a special object (or whatever) comes from it being unusual and not commonplace. If it's not only (potentially) commonplace, but there's no obvious way to distinguish an original from a knock-off, it loses its special cool.

What's scarce in this economy isn't the product per se -- it's just bits, so there's no marginal cost of making a million instead of a dozen -- but that coolness premium. That's what people are paying for. This app makes it possible for an individual to gain the reputational/cool benefits of particular purchased content without paying the economic cost, while simultaneously shortening the period during which the content will be unusual (and thereby attractive). Designers who can put out new ideas quickly will do relatively well in the resulting economy of novelty, while designers that have counted on ongoing sales of existing designs to build up their in-game bank accounts will suffer.

Taran Rampersad (who wrote for WorldChanging for awhile, and maintains his own blog at Knowprose) observes:

"CopyBot alone may not be the doom of the current model of the Second Life economy, but it's a sign that doom is in the offing."

What?! Seriously, Jamais, there is no premise.

I don't want this to be a debate about the details of CopyBot specifically; my point isn't that the CopyBot application in and of itself is going to destroy SL. It's a broader category of threat, and a narrower target. CopyBot may be shut down, but the larger issue will persist; at the same time, it's not SL as a whole that's in danger, but a very particular way of making money within SL.

Generally speaking, systems that make it possible to make effectively-free duplicates of content make economic models predicated upon the relative scarcity of that content (whether the content itself, or the coolness surrounding the content) nearly impossible to maintain. If your industry is based on selling music, systems that make it effectively free to distribute copies of that music are a serious threat to your existing economic practice. This doesn't mean that new models won't emerge, or that it's impossible to make money (dollars or Lindens) in a free-duplication world, only that economic practices that assume persistent scarcity are doomed.

Drawing this back to my original larger point, this aspect seems intrinsic to "bit-based" economies, where the products being bought and sold (or traded...) exist as digital information. That's what the music industry found, what the movie industry is wrestling with, and what served as the key catalyst for the development of new institutions such as the "Creative Commons." Arguably, the emerging world of commonplace fabrication systems (leading to nanofactories or whatever) seems to be one in which atom-based (i.e., physical goods) production takes on characteristics of the bit-based (i.e., information) world. This strongly suggests that we will see similar fights about duplication of previously scarce products, and similar threats of traditional economic practices being undermined.

What happens in Second Life with this situation is important, therefore, because it will serve as a possible model for how the fabrication future will deal with abundant duplication. My interest isn't in seeing SL market models collapse -- my interest is seeing what comes next, and how people operating in this economy of novelty and abundance learn to thrive.

Tags:
CopyBot, Economics of Abundance, Economics of Scarcity, Fabrication, Second Life

Comments

The world we live in changes scarcity to abundance often and more quickly - but never for everything at once. Scarcity and abdundance are relative.

100 years ago , information was scarce, which is to say human attention was overabundant. Today, we have spam, and not enough attention to sort it all.

This leads me to think that there will always be something scarce on which to base an economy - if scarcity is really what you're interested in.

Which leads me to why SecondLife has never really excited me. I find it ironic that LL is permitting the libSL developers to experiment as freely as they have, considering that LL's own captive economy business model depends upon the enforced artificial scarcity of their own software code and services.

"Owning" something in SL is kind of like owning a ride at Disneyland. Sure, it's "yours", but God forbid you ever decide to leave the park with it.

I know you won't discuss what Copybot can and cannot do, but it's a very significant part of your opening paragraphs. Selective dismissal in this case works against you. The first part would go further if you understood what Copybot *can* do. Here, I'll make it easy:
http://www.libsecondlife.org/content/view/30/

The technical abilities alone do not support what everyone was whining about; further, copy protection mechanisms do exist:
http://www.knowprose.com/node/16654

The Copybot hasn't made those protections less relevant. The method of copying requires you to be wearing the stuff being copied, and only threatens the very same things which were threatened before.

Your points on the digital economy are not lost on me - but SL has an inherent copy protection system. If you actually log in, I can show that to you or you can see for yourself. It's all about permissions. Therefore it is not as simple as you think... and it can be made more robust.

The methodology which Copybot uses is an Intercept, and it ONLY works on avatars and what they are wearing. And even then, it produces poor copies.

Log in. When you get your feet wet you'll undrstand better.

As for other economies that are bit based - I trust your judgement on those. But SL? It's a little bit different.

CopyBot isn't the issue. The issue is the community. Whether it's OGLE or CopyBot or whatever comes next, the tool is only as threatening as the community's potential for using it; and the economy is only as vulnerable as those people allow it to be under those circumstances. In this instance, the economy represents the strength of the community. If it's damaged by a tool that functions only when used by community members, then that community wasn't itself very strong and that in and of itself should be of concern.

What the appearance of CopyBot has done is forced a fair number of residents to take a look at their own hypocrisy; to see their behavior within their own communities (one real and one virtual) in a new light. In real life they often think nothing of downloading content for which they provide no remuneration to the creator (or to whom the creator has sold the rights); yet in SL they've become the creator and find themselves in the position of those to whom they gave so little consideration. Payback, as they say, is a bitch.

Now had they been good members of the community, they would have been actively involved in shaping the laws instead of violating them. Had they been good members of the community, they would have self-regulated their own behavior in accordance with the laws of that community and understood that what's at stake is the greater good (which can be a more selfish motivation than immediate gratification). And had they been good members of the community there would be no revelations of what it must be to be a struggling, independent musician caught up in the download frenzy alongside those who have already made their fortune.

What I hope is that virtual worlds such as SL provide enough insight to people to prepare them for what is on the horizon. Because in the end there *is* a shared scarcity among both bits and atoms. We just don't pay enough attention to it.